Indian stocks have been sliding since the New Year amid inflation fears, but there are still places where investors can get in, said Ron Shah, managing partner at Jina Ventures.
“Wholesale food prices are up 18 percent, and wholesale inflation rate is up over 8 percent, so these are alarming figures [that restrict] liquidity in the banking sector, so the government is taking ... sharp action,” Shah told CNBC. “We’re expecting a 1 percent interest rate hike this month.”
Shah said he expects companies such as Dr. Reddy's Laboratories and Sterlite to see some downward movement, but he's bullish on the banking sector.
“There’s still some room to grow there,” he said. “HDFC Bank and ICIC Bank are good stocks.”
Shah added that Tata Motors is a “buy” and said the firm will have “phenomenal earnings.”
In addition, he said investors should keep an eye on the Indian rupee.
“The rupee has been weak because oil is expected to go up, and money’s flooding into the dollar.”
Scorecard—What He Said:
- Shah's Previous Appearance on CNBC (Nov. 18, 2010)
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- China vs. India — Where to Invest Now: Strategists
- Market Pro's Top 5 Plays on India
- Who's Really Ahead In The Economic Race, China or India?
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No immediate information was available for Shah or his firm.